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Nintendo stock closed up another 12.8 percent in Tokyo on Tuesday as the runaway success of the Pokemon Go mobile game continuing to help boost the company’s market value nearly 60 percent since it was released on July 6.
Tuesday’s closing price values the Kyoto-based gaming company at ?3.24 trillion ($31.4 billion), up from $19.6 billion on the day Pokemon Go hit app stores. Nintendo holds stakes in The Pokemon Company, a longtime collaborator and owner of the rights to the popular characters, and in Niantic Labs, developer of the hit app. The double boost to the fortunes of Nintendo, which has struggled in recent years, has convinced investors to add $11.78 billion to the value of the company.
Niantic isn’t releasing official figures, but estimates put the number of downloads at more than 7.5 million, with in-game purchases generating millions of dollars a day. Daily active user numbers are already approaching those of Twitter, while players are spending an average of more than 43 minutes a day on the game.
Nintendo owns 32 percent of The Pokemon Company and is reported to hold a similar sized stake in Niantic, though a spokesperson at its Kyoto headquarters declined to confirm this to The Hollywood Reporter. Niantic was a Google internal startup before being spun off, and the internet giant remains an investor.
The Pokemon Go augmented reality game allows users to catch pocket monsters that “appear” in real-life locations on their smartphone screens through GPS technology. The game has become a phenomenon in the U.S., Australia and New Zealand, where it has crashed servers, caused accidents and even been used to lure players into the hands of armed robbers.
The dates for rollouts in other markets have yet to be announced, but there are rumors that it may be as soon as this week for some territories, including Japan.
Nintendo has struggled in recent years with disappointing sales of its Wii U console, the follow-up to the mega-hit Wii, as casual gamers flocked to smartphones and tablets. The company had been reluctant to license its popular characters for games on other devices and was slow to ride the smartphone wave. The Pokemon Go game is the latest example of the company’s successful diversifications during its long history.
Launched in 1889, Nintendo first made a name for itself as a purveyor of hanafuda picture cards used in a traditional Japanese gambling game. Some of its best customers were yakuza gangsters, whose roots are in gambling, and who liked to use a new deck for each game. In the 1950s, Hiroshi Yamauchi, great-grandson of Nintendo’s founder, signed a groundbreaking deal with Disney to put the American company’s characters on its regular playing cards, producing a huge hit in Japan.
Following experiments with some of the earliest video games in the 1970s, Nintendo scored a major hit with the Game & Watch in 1980. Although the company went through plenty of tough times and failures in the following decades, it bounced back again and again with hits including the Game Boy, DS and Wii consoles, as well as iconic characters such as Donkey Kong, Mario and Zelda.
Nintendo faced another challenge this time last year when its president, Satoru Iwata, died after a battle with cancer. Pokemon Go was developed from an idea by Iwata and Tsunekazu Ishihara of The Pokemon Company in 2013. Iwata was replaced as president by Tatsumi Kimishima, who joined Nintendo from The Pokemon Company in 2000.
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